St. Stephen Martyr School opened its doors in 1928 to provide the families of Monterey Park with an opportunity for their children to receive a Catholic School education. Under the leadership of Fr. Michael Conneally, four classrooms were opened and staffed by the Sisters of the Holy Names of Jesus and Mary. The school celebrated its first graduating class in 1928. The needs of the Catholic community in Monterey Park continued to grow. As a result, a new church and convent were built. New classrooms were added to the school until it became a fully enrolled 16-room school serving students in grades 1 through 8. When the 16-room configuration was completed in 1964, the school served 743 pupils. By early 80s, enrollment was approximately 600 students.

The community of the Sisters of Holy Names served St. Stephen Martyr School from 1926 until 1993, when a lay principal was appointed. The school successfully added a Kindergarten classroom in 2000. A science lab and new computer lab were added in 2003, and a library was opened in 2005.  St. Stephen School continues to work with families to provide an education that reflects Catholic values, traditions, and academic excellence.